Landlord Credit Bureau

Legal Framework Canada

Legal Framework Canada

Summary1
 

Under Canadian Provincial and Federal law you may legally use the services provided by the Landlord Credit Bureau platform. Landlord Credit Bureau includes three primary services accessible within the platform but not all services are accessible in all Provinces. As long as the information reported is accurate, the Landlord Credit Bureau platform has numerous automated protections and guidance in place which help ensure our landlord, property manager and tenant members are protected and that reporting and usage of the different services remains in compliance with relevant legislation. Here is how it works:

For a tenant who has given consent, such as through the inclusion of the LCB Application and Lease Clauses in their application for tenancy or lease, or by logging into the Landlord Credit Bureau tenant portal to confirm consent, nothing further is required.

For a tenant who pays on-time and does not owe money, but has not given consent, landlords may create a record using LCB’s platform for their internal recordkeeping purposes. The tenant then has the choice to opt-in to receive benefits (i.e. improved credit rating, positive Tenant Record). If such tenant does not opt-in nor provide consent, the landlord may still maintain a record of their tenancy using LCB’s platform, and as long as the tenant does not owe a debt, such record will solely be used for the landlord’s internal recordkeeping and management purposes and not shared. If a debt occurs at a later date, then the debt may be subject to disclosure to Credit Bureaus by the landlord pursuant to the following paragraph.

For a tenant who does not pay rent when owed, and thus owes a debt, applicable legislation enables landlords to report that debt without notice or consent under an approved purpose (i.e. to collect the debt). Late payments may be immediately reflected on the Tenancy Record and upon a debt being owed for 30+ days the debt is shared with Credit Bureaus.

Landlord Credit Bureau provides free Legal Defence for members.  Landlord Credit Bureau will handle the defence and cover the costs if there is ever a complaint.  See the Legal Defence page for details and applicable terms and conditions.

Since LCB’s inception, we are proud to share that there have not been any successful complaints that an individuals information has been misused filed against Landlord Credit Bureau or any of its landlord or tenant members for using Landlord Credit Bureau.  Landlord Credit Bureau handles the protection of all individuals and the security and accuracy of information within the Landlord Credit Bureau platform with the utmost priority.  Misuse of the Landlord Credit Bureau platform will not be tolerated.

The Details
 

Responsible Tenants Benefit From LCB:

LCB provides significant benefits for our tenant members. Tenants can finally build credit by paying rent and create a Tenant Record to help them receive priority for future housing. Even if a tenant is having financial difficulty, as long as they communicate with their landlord and create a reasonable payment plan, they can still receive the same benefits. It is only tenants who choose to be delinquent and choose to not communicate with their landlord that will find there is accountability and consequences for such choices.

Rent is many consumers’ largest single monthly payment, but to their detriment it is rarely reflected on their credit report:

  1.  LCB facilitates tenants to positively impact their credit reports through the inclusion of rent payments.
  2.  LCB assists consumers new to credit (i.e. young people) and new to Canada (i.e. immigrants) with building a credit file and gaining access to credit.
  3.  LCB enables consumers with thin credit files to positively impact their credit reports and thus unlock credit and better rates for credit.
  4.  For tenants with poor credit, but a history of always paying rent, they find it harder to secure housing. LCB enables them to show potential landlords that despite a low credit score, they are a responsible tenant and should be rented to.
  5.  Relevant to COVID-19 and beyond, LCB enables rent deferral agreements and payment plans to be registered which then enables tenants to create a positive tenant record that they can use when applying to rent in the future and still help strengthen their credit rating despite unexpected financial difficulties.
  6. From a housing supply and quality standpoint, LCB helps increase the supply and quality of rental housing for responsible tenants. LCB substantially reduces the risk and cost of delinquent tenants which encourages more rental housing to be created, enables smaller landlords to afford to continue providing rental housing (i.e. basement suites), and enables all landlords to afford more repairs & improvements and even reduced rent prices. The small percentage of individuals who are intentionally delinquent, cost the rental housing industry over $3 Billion per year in Canada which impacts the housing supply for everyone.

LCB’s goal is for all parties to fulfill their responsibilities, act responsibly and for both landlords and tenants to benefit as a result.

Landlords May Report To LCB & Other Reporting Agencies:

LCB includes three primary divisions accessible within the platform: 1) a recordkeeping service for landlords’ internal recordkeeping and management purposes whereby such tenant’s personal information is not collected, used, nor disclosed; 2) a Reporting Agency for when a tenant gives consent or consent is not required; and 3) a portal service through which landlords and tenants are able to share rent payment habits with Reporting Agencies.

It is well established practice for landlords to report tenant information to collection agencies and share that information with Reporting Agencies, also known as Credit Bureaus, such as Equifax and TransUnion for the purpose of collecting debts and mitigating fraud. Reporting to Credit Bureaus may happen indirectly through collection agencies or directly by landlords. While other Credit Bureaus may have chosen to not deal directly with landlords, LCB does deal directly with landlords of all sizes.

Applicable credit reporting, consumer protection and privacy legislation enables landlords to report to LCB’s Reporting Agency and to other Reporting Agencies, with consent, through implicit consent, or without consent when they are doing so for an approved purpose such as for the purpose of collecting a debt owed to them, for investigation of a breach of an agreement or a law, to detect or suppress or prevent fraud, or when reporting is clearly in the interests of the individual.

Reporting Agencies are subject to provincial and federal legislation. LCB complies with, and in several instances exceeds, the requirements under that legislation.

Blacklists are illegal. LCB does not maintain any blacklists. LCB collects and reports both positive and negative information, provides tenants free access to their records, and provides several dispute mechanisms. Reporting tenant information to other companies which are not a Reporting Agency and do not have the requisite consumer protections, is likely illegal and may create personal liability.

The LCB platform has numerous automated protections and guidance in place to ensure our landlord, property manager and tenant members are protected and that usage and reporting remains in compliance with relevant legislation.

Landlords May Access Tenant Records From LCB:

The ability for housing providers to screen their applicants for rental history, credit and tenancy-worthiness and the practice of providing rental history to other landlords is recognized as an accepted and established practice throughout the industry.

With consent, landlords are entitled to view credit reports and tenant records in connection with the tenant wanting to enter into or renew a tenancy agreement. Landlords must have consent from the tenant before viewing such information.

Accuracy Of Data:

Before allowing users to contribute data, LCB verifies all user’s identification, using document submission and/or a secure process provided by Equifax. LCB does not allow information to be contributed anonymously. LCB only reports information from landlords and tenants who have had their identity and legitimate purpose verified.

Users contractually agree to only report factual information and to only use LCB for a valid purpose, or risk personal liability. LCB also maintains a viewable record of anyone who contributes or views data.

Other Protections For Tenants:

In addition to the preceding protections, tenants are given the opportunity to provide a statement in a way that allows all sides to be heard and saved on the Tenant Record.

Tenants may dispute information that a landlord has provided by submitting a dispute to LCB or directly to the landlord. If the tenant disputes information directly to the landlord, the landlord may contact LCB for assistance. 

LCB proactively notifies tenants, provides free access to review and monitor records, and if information is disputed, there are multiple mechanisms in place to handle such disputes. LCB will then investigate.

Further, tenants are provided a grace period before data is shared with Credit Bureaus, so that there is time to review their record, make sure all information is accurate, and to pay any debts or agree to a payment plan.

For Further Information:

Privacy Policy
Terms of Use
Terms of Service

Clauses to Add To All Application and Lease Templates
 


LCB recommends adding the clauses below to all Applications for Tenancy and Lease templates:

Specific Legislation & Guidance For Landlords Reporting to Credit Bureaus
 


Examples of tenants being convicted of fraud for not paying their rent:


Office of the Privacy Commissioner of Canada

  • Can a landlord put my name on a “bad tenant” list?


    “Our office has found that landlords do not have the right to disclose information such as a poor payment history to an unregulated or ad hoc ‘bad tenants list.”
    However, formal and regulated mechanisms, such as credit agencies, may be notified in appropriate circumstances.”

    https://www.priv.gc.ca/en/privacy-topics/landlords-and-tenants/privacy-in-the-landlord-and-tenant-relationship/

  • Don’t shame ‘bad’ tenants


    “Despite best efforts, a rental relationship may not go smoothly. From your perspective, the tenant may have been disruptive or damaged the unit, had a poor payment history, or other factors. However, this does not give you the right to disclose this information by, for instance, contributing to an unregulated ‘bad tenants list.’ Formal and regulated mechanisms, such as credit agencies, may be notified in appropriate circumstances; however, ‘vigilante’ actions are seldom, if ever, permitted by law.”

    https://www.priv.gc.ca/en/privacy-topics/landlords-and-tenants/02_05_d_66_tips/

  • Debt collection is not a blank cheque for disclosure


    “Lastly, there are certain exceptions to PIPEDA’s consent requirements for disclosure of personal information to pursue a debt. It is important to keep in mind that these are limited to, among other factors, purposes that a reasonable person would consider appropriate under the circumstances. For instance, in past investigations our Office has found broad disclosure of detailed information about an outstanding debt to an individual’s family members, co-workers or on social media, to be wholly inappropriate.”

    https://www.priv.gc.ca/en/privacy-topics/landlords-and-tenants/02_05_d_66_tips/

For Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Newfoundland and Labrador, Nunavut, Northwest Territories, and the Yukon:

  • If the tenant has given consent, that is all that is required (Note: LCB recommends adding the LCB clauses to all Applications for Tenancy and Lease templates).
  • If the tenant has not given consent, the Federal Personal Information Protection and Electronic Documents Act (“PIPEDA”) enables landlords to still report for certain purposes:
  • Disclosure is allowed without the tenant’s knowledge or consent pursuant to:
    • Section 7(3)(b) for the purpose of collecting a debt owed by the individual to the organization;
    • Section 7(3)(d.1) for the purposes of investigating a breach of an agreement or a contravention of the laws of Canada or a province that has been, is being or is about to be committed;
    • Section 7(3)(d.2) made to another organization and is reasonable for the purposes of detecting or suppressing fraud or of preventing fraud that is likely to be committed.
    • Link to the Act: Link to the Act: Personal Information Protection and Electronic Documents Act
  • Many provinces do not require LCB to be provincially registered.
  • LCB is registered in Ontario as a consumer reporting agency under 2642985 Ontario Inc. To see the registration go to: Ontario Consumer Reporting Agencies

For British Columbia:

  • If the tenant has given consent, that is all that is required (Note: LCB recommends adding the LCB clauses to all Applications for Tenancy and Lease templates).
  • If LandlordBC’s template “Application for Tenancy” was used, then consent may already have been given pursuant to Section E in that application (Note: LCB still recommends adding the LCB clauses to all Applications for Tenancy and Lease templates).
  • If the tenant has not given consent, the B.C. Personal Information Protection Act (“PIPA”) enables landlords to still report for certain purposes:
  • Disclosure is allowed without the tenant’s consent pursuant to:
    • Section 18(1)(c) it is reasonable to expect that the disclosure with the consent of the individual would compromise an investigation or proceeding and the disclosure is reasonable for purposes related to an investigation or a proceeding;
      • Note: Section 1 defines “investigation” to mean an investigation related to (a) a breach of an agreement, (b)a contravention of an enactment of Canada or a province, (c) a circumstance or conduct that may result in a remedy or relief being available under an enactment, under the common law or in equity, or (d) the prevention of fraud if it is reasonable to believe that the breach, contravention, circumstance, conduct, or fraud in question may occur or may have occurred;
    • Section 18(1)(g) the disclosure is necessary in order to collect a debt owed to the organization;
    • Section 18(2); (3); and (4) may also apply if the above two sections do not.
    • Link to the Act: Personal Information Protection Act
  • Monetary orders from the Residential Tenancy Branch (RTB) are NOT REQUIRED to report to LCB:
    • RTB Decision October 14, 2011: Landlord sent a debt to a collection agency without first establishing an entitlement to recover that amount by way of obtaining a Monetary Order. Such conduct does not negate the tenant’s obligation to pay the landlord. The landlords’ actions, with respect to sending the debt to a collection agency is not a violation of the Residential Tenancy Act, Residential Tenancy Regulations or tenancy agreement. Therefore, any claims related to such conduct fall outside the jurisdiction of the Residential Tenancy Act and its authority to resolve such a dispute. Dispute Resolution Services – Decision1698
    • RTB Decision November 8, 2016: Landlord sent tenant’s debt to a collection agency and did not file any Application for Dispute Resolution with the RTB nor get a monetary order. Tenant complained. The tenant’s application was refused pursuant to section 59(5)(a) of the Residential Tenancy Act because the tenant’s application did not disclose a dispute that may be determined under the Act. Dispute Resolution Services – Decision6592
    • RTB Decision March 8, 2019: Landlord sent tenant’s debt to a collection agency. Tenant complained the Landlord didn’t have a monetary order. Landlord did not apply for a monetary order and thus the RTB did not issue a monetary award in regards to this tenancy. As the Branch was not involved in this matter at any point and did not issue the monetary order, they dismissed the application in its entirety without leave to reapply. Section 9.1(1) of the Residential Tenancy Act. Dispute Resolution Services – Decision6370

For Alberta:

  • If the tenant has given consent, that is all that is required (Note: LCB recommends adding the LCB clauses to all Applications for Tenancy and Lease templates).
  • If the tenant has not given consent, the Alberta Personal Information Protection Act (“PIPA”) enables landlords to still report for certain purposes:
  • Disclosure is allowed without the tenant’s consent pursuant to:
    • Section 20(i) the disclosure of the information is necessary in order to collect a debt owed to the organization
    • Section 20(m) the disclosure of the information is reasonable for the purposes of an investigation or a legal proceeding;
    • Section 20(n) the disclosure of the information is for the purposes of protecting against, or for the prevention, detection or suppression of, fraud, and the information is disclosed to or by (i) an organization that is permitted or otherwise empowered or recognized to carry out any of those purposes (i.e. a reporting agency such as LCB).
    • Link to the Act: Personal Information Protection

For Quebec:

  • LCB does not currently operate in Quebec.

1 Disclaimer: The information contained herein does not constitute, and is not intended to constitute, legal advice. This information is for general information purposes only. Information may not be the most up-to-date or address local requirements (e.g., city or province). This document contains third party links, LCB is not responsible for the content on such third-party websites.